§ 17-161. Administration of the Homebuyer Loan Program.

(A)

The Homebuyer Loan Program shall be administered through the County's Public Housing and Community Development department (the "Department"), or successor department or other department as designated by the County Mayor. The Department shall develop the Homebuyer Loan Program Guidelines consistent with this ordinance, which guidelines may be revised by the County Mayor or County Mayor's designee from time to time and which shall be made available on the Department's website and provided to all Certified Loan Officers and Certified Closing Agents. The program rules described in this ordinance shall supersede any other homebuyer mortgage assistance program guidelines or legislation not in conformance herewith.

(B)

Qualification of Borrowers. Qualification of borrowers shall be conducted by "Certified Loan Officers", which shall mean loan originators and mortgage brokers licensed by the State of Florida who have received a certification of qualification by the County following a training program to be conducted by the County or other agency, as may be delegated by the Board of County Commissioners (the "Board"). There shall be no fees or costs charged by the Certified Loan Officers to either the County, applicants, or approved borrowers for processing loan applications or qualifying borrowers for the County's Homebuyer Loan Program.

Certified Loan Officers shall submit the borrower's completed Homebuyer Loan Program application package, including completed application forms, qualification letter, conditional underwriting approval, fully executed purchase and sale agreement (if executed), and conditional approval of the first lender along with supporting documentation to the Department. A full list of documents to be submitted to the Department shall be developed by the Department, or successor department, and provided to the Certified Loan Officers during the training program required herein. In order to expedite the home buying process, Certified Loan Officers may approve borrowers prior to the borrower's execution of a purchase and sale agreement for a home.

(C)

Loan Review and Approval. The Department shall conduct a quality control underwriting review to ensure completeness of the Homebuyer Loan Program application package and that each borrower meets the basic qualifications of the program. This review shall be completed no more than five (5) business days from the time the completed Homebuyer Loan Program application package is submitted to the Department.

(D)

Loan Closing. The Department staff shall process the completed Homebuyer Loan Program application package through post-closing. During that time, the Department shall review the title policy, insurance and first lender loan commitment. The Department may establish additional items to be reviewed prior to closing. The Department shall issue a loan commitment for funding and process the request for funding to the Finance Department, or other funding department, for disbursement of the loan funds at the time of closing.

Loan closing shall be conducted by a "Certified Closing Agent," which shall mean a title insurer, title insurance agent or agency, or attorney agent in the agent's or agency's capacity licensed by the State of Florida who has received a certification of qualification by the County following a training program conducted by the County or other agency, as may be delegated by the Board.

At loan closing, the borrower shall execute the County's loan documents, which shall consist of a promissory note, a mortgage, and a restrictive covenant. The loan documents shall be provided to the Certified Closing Agents and may not be substantially modified without the consent of the Department. The Department shall provide instructions to Certified Closing Agents describing how the County's loan documents are to be completed. All provisions regarding the terms of the loans shall be encompassed in the documents provided.

(E)

The loans provided through the Homebuyer Loan Program (the "Homebuyer Loan") shall include the following terms.

(1)

Limitations on Use and Resale of Property. Borrower shall use the property as a primary residence. The property may not be rented, leased, or otherwise used as income or investment property for as long as the loan remains in effect. Violation of this provision shall cause the loan to be accelerated and the entire balance of the loan, including principal and interest, shall become immediately due and payable to the County. If the borrower sells, transfers, rents or vacates the property, the entire balance of the loan, including principal and interest, shall become due upon vacating, selling, renting or transferring the property.

A restrictive covenant shall be required as a part of the Homebuyer Loan Program, which covenant shall include the residency, resale restrictions and shared equity restrictions set forth in this ordinance as well as other terms included at the discretion of the Department not inconsistent with this ordinance.

(2)

Subordination of the County's Homebuyer Loan. The County's loan provided through the Homebuyer Loan Program shall be a second mortgage loan in priority, subordinate to the first lender, so long as the first loan (a) is for an amount greater than the amount of the County's Homebuyer Loan, (b) has a fixed interest rate considered to be a reasonable market rate, (c) has no balloon payment, and (d) has no pre-payment penalty. If the other loan(s) are for amounts less than the amount of County's Homebuyer Loan, then the County's Homebuyer Loan shall be the senior loan with priority over the other lender(s). The County's loan provided through the Homebuyer Loan Program may be a third mortgage loan or lower in priority, at the discretion of the Department, so long as the senior lender is known to be a state, county, city, local housing agency, or nonprofit organization. All loans other than the first mortgage loan must be subordinate to the County's Homebuyer Loan Program loan, unless the subordination is expressly consented to by the Department upon a finding that such subordination is in the best interest of the County.

(3)

Loan Terms.

(a)

Term of Loan. The Homebuyer Loan shall be for a term of 30 years, and interest and payments shall be calculated based upon a 30-year term.

(b)

Interest rate. The Homebuyer Loan program shall encourage homeownership in the County's NRSAs and NOAs by offering more favorable loan terms for Homebuyer Loans used to acquire homes in the NRSAs and NOAs.

(i)

Target Area Loans. Homebuyer Loans used to acquire homes in the County's NRSAs and NOAs shall have a one percent (1%) compounded interest rate and shall be recorded as satisfied after ten (10) years, so long as the Homebuyer Loan is not in default or in arrears at the time of satisfaction, Borrower has resided in the property for the entire life of the loan, and Borrower has demonstrated a general diligence and overall compliance with the loan terms. The County Mayor or County Mayor's designee shall publish standards by which the Borrower's general diligence and overall compliance with the loan terms may be established.

(ii)

Non-Target Area Loans. Homebuyer Loans used to acquire homes outside of the County's NRSAs and NOAs shall have a 2 percent (2%) compounded interest rate and shall be recorded as satisfied after twenty (20) years, so long as the Homebuyer Loan is not in default or in arrears at the time of satisfaction, Borrower has resided in the property for the entire life of the loan, and Borrower has demonstrated a general diligence and overall compliance with the loan terms. The County Mayor or County Mayor's designee shall publish standards by which the Borrower's general diligence and overall compliance with the loan terms may be established.

(c)

Shared Equity. Following loan closing on the Homebuyer Loan, if borrower sells, transfers or otherwise conveys the property within six years after closing on the Homebuyer Loan (the "Shared Equity Period"), borrower shall share with the County a percentage of the proceeds of the resale in the following manner:

Shared Equity Period: Number of Years after Closing on Homebuyer Loan with the County	Percentage of Profit from Resale to be Paid to the County
1	100%
2	100%
3	100%
4	50%
5	50%
6 or more	0%

 

During the Shared Equity Period, Borrower shall not resell the property for less than fair market value, as determined by an appraisal from a licensed appraiser. In year five of the Shared Equity Period, if Borrower resells the property but purchases another home in Miami-Dade County within 180 days and resides in that home as Borrower's primary residence, the profit retained by the County as shared equity shall be returned to the Borrower. The County shall hold its portion of the shared equity in escrow for 180 days, plus any reasonable extension of time permitted at the discretion of the County Mayor or County Mayor's designee. There shall be no maximum resale price. At any time, the borrower shall have the right to pay the County's Homebuyer Loan in full, and upon the payment of all outstanding principal, interest and unpaid fees or costs, as set forth in the loan documents, the borrower and the property shall be released from all restrictions. As such, the borrower shall not be required to reside in the property for any set period of time, so long as the Homebuyer Loan is repaid in full and in accordance with the Shared Equity provisions set forth herein. There shall be no pre-payment penalties other than the Shared Equity provisions described in this ordinance.

(d)

Maximum Loan Amount. The maximum loan amount for a Homebuyer Loan offered through this program shall be determined by the Certified Loan Officers, but in no event shall the amount of such loan be greater than $100,000.00 for Target Area Loans or $80,000.00 for Non-Target Area Loans.

In order to avoid borrowers being cost-burdened by housing expenses, the Homebuyer Loan shall be implemented in a manner so as to ensure that no more than 40 percent of the borrower's gross household income is used to pay for "Housing Costs," which means all mortgage payments, insurance and taxes. Borrower's payments on the Homebuyer Loan shall be established at the time of loan closing and shall remain the same for the entire term of the homebuyer loan unless borrower and the County mutually agree on a loan modification.

(e)

Down Payment Required. The County shall require a down payment of at least one percent (1%) of the purchase price, to be paid from the Borrower's own funds.

(4)

Purchase Price Maximum. The maximum purchase price for borrowers to purchase a home with a Homebuyer Loan shall be 90 percent of the area median purchase price, as determined using purchase price limits established by U.S. HUD for the Home Investment Partnerships ("HOME") program (the "Maximum Purchase Price"). The Maximum Purchase Price shall be established using the most current data as of the date of execution of the contract for purchase and sale. With respect to the issuance of a Homebuyer Loan, the Maximum Purchase Price set forth in this ordinance shall supersede any other maximum purchase price set forth in any County resolution or ordinance. However, the Maximum Purchase Price established by other County programs or legislation, such as the Infill Housing Initiative Program, Workforce Housing Development Program, or the sale of County-owned properties, shall not be affected by this ordinance.

(5)

Loan Servicing. The Department, or successor department or other department as designated by the County Mayor or County Mayor's designee, shall serve as the loan servicer on all Homebuyer Loans.

(6)

Borrower Eligibility. Borrowers shall be "First Time Homebuyers," as defined by the HOME program at 24 C.F.R. § 92.2, with household incomes not greater than the 140 percent of area median income, as established by U.S. HUD.

Further eligibility requirements shall be set forth in the Homebuyer Loan Program Guidelines, established by the Department, which shall be consistent with Section 125.0167 of the Florida Statutes and Section 29-7 of the Miami-Dade County Code of Ordinances.

(7)

Inspections Required. Prior to loan closing, borrowers must obtain an inspection by a qualified home inspector of the home they intend to purchase. The breadth of the home inspection shall be sufficient to alert homebuyers to significant defects in the home, including structural problems, and identify whether the home is in compliance with the Miami-Dade County Building Code.

(8)

Use of Repaid Loan Funds and Program Income. The Homebuyer Loan Program shall operate as a "revolving" loan fund. All repaid Homebuyer Loan funds or program income received through administration of the Homebuyer Loan Program shall be reallocated by the County back into the Homebuyer Loan Program to be used for additional Homebuyer Loans. The Department shall incorporate this policy into its action plans, Local Housing Assistance Plans, legislative items, and policy documents governing the County's use of Documentary Surtax funds.

(Ord. No. 15-127, § 1, 11-3-15)